Saturday, November 7, 2015

India loses its Nepal monopoly as China gets set to become country's main commodities supplier

People's Liberation Army enters Nepal after the recent earthquake

My article India loses its Nepal monopoly as China gets set to become country's main commodities supplier appeared in Mail Today.Here is the link...

It was unthinkable a few years ago, but it has happened.On November 3, Xinhua, China’s official news agency, announced: “Nepal has sent four fuel tankers to China's Tibetan city Jilong [Kyirong] to receive the first lot of fuel grant to ease the fuel crisis in the country following India's blockade.”A day earlier, the tankers belonging to the Nepal Oil Corporation (NOC) crossed the newly-opened border post between Nepal and China at Rasuwagadhi.Deepak Baral, the NOC’s spokesperson stated: "Though we planned to send 12 empty tankers today, only four have been sent owing to heavy snowfall which has obstructed the highway.”Though the NOC tankers had a capacity of 12,000 liter, they only collected 9000 liters petrol each, due to the poor road condition.In a way, the number of tankers was irrelevant: China just wanted to break India’s monopoly of oil supply to Nepal and publicize it.For Nepal, it was a historic first; for India, it will remain for a long time, something to ponder, as it marks the end of a special relationship with Nepal which lasted (with ups and downs) for centuries. Will the Indian diplomacy have a look at what went wrong? Introspection is usually not South Block’s forte.There is no doubt that the opening of Kyirong (Chinese: Gyirong or Jilong) land port between Tibet (China) and Nepal can provide a tremendous boost to Nepal's all-important economic relations with its giant northern neighbour. Already in 2014, the official China Tibet Online reported: “The Gyirong Port has been listed in the key work plan of national ports in 2014.”The earthquake in April this year (with its epicenter in Kyirong) delayed the port’s operations, but it is now functional.Earlier in October, The South China Morning Post had reported that China may provide fuel to Nepal via Kyirong ‘amid undeclared blockade by India’: “China will supply Nepal with 1.3 million litres of fuel to ease crippling shortages after protests over a new constitution blocked imports from India.” Even after trucks had been stranded at the India-Nepal border for several weeks forcing fuel rationing across Nepal, observers were incredulous. Can China supply oil to Nepal? But on October 26, Sushil Bhattarai, NOC’s deputy managing director confirmed to Agence France Press (AFP) that China had agreed to offer ‘as a grant’, 1.3 million litres of petrol. The French news agency noted that it was “unclear whether China has donated fuel to Nepal”, adding “the two countries have never commercially traded oil or gas [in the past].”A few weeks earlier, the Nepalese Ambassador to India Deep Kumar Upadhyay had given a hint of what was coming, he had asked India not to ‘push it to the wall’ by blocking petroleum and other essential supplies, otherwise the landlocked country would have to find alternatives …‘despite logistical difficulties’.Even if the constitutional issues are resolved to the satisfaction of all (and not only a section of the Nepalese population), China is already the clear winner.On September 21, Beijing had congratulated Kathmandu on the promulgation of its new constitution made public on the previous day. Chinese Foreign Ministry’s spokesperson Hong Lei had stated: “China attaches great importance to the China-Nepal ties, and is willing … to provide as much help as it can for the economic and social development of Nepal.”The relations between Nepal and Tibet are upbeat too. On the day the new Constitution was promulgated in Nepal, Dadhiram Bhandari, an official at Nepal’s Consulate in Lhasa, lavishly praised China for its role in Tibet: “Despite having a similar topography, Tibet has taken a heightened step in development whereas Nepal is still crawling.”Bhandari told Xinhua that Nepal should learn from the dedication of the Chinese government and its commitment towards the development of Tibet.This is of course propaganda, but the fact remains that Nepal and China are getting closer by the day, at a time when the relations between Kathmandu and Delhi are frosty.Nepal is also eying at the waves of tourists invading Tibet (17 million are expected in 2015). Kathmandu calculates that it would greatly benefit if only 10 percent of the Chinese tourists to Tibet could be diverted to Nepal. Out of the 8 lakhs of foreign tourists visiting Nepal every year, already nearly half are Chinese.Reverting the trend will not be an easy task for Delhi.Many in Kathmandu are happy with the new turn of events. An editorial in The Himalayan Times mentioned the MoU between NOC and Petro-China: “Nepal has ended the four-decade-old monopoly of the Indian Oil Corporation (IOC) for the supply of petroleum products to Nepal.”The Nepali newspaper adds: “The initial understanding is that Nepal would import up to one-third of petrol, diesel and cooking gas required for Nepal at the same price that Nepal has been buying from IOC.”But perhaps even more dramatic for India, by the end of the decade the train will reach Kyirong. Beijing has planned the construction of a railway line connecting Shigatse with Kyirong county and Nepal’s border during the 13th Five-Year Plan (2016-2020).Then, not only Chinese tourists, but also commodities, including oil, food products, etc will flow into Nepal. In the long-term, it signifies that China will replace India as the main supplier of commodities; it will have serious political consequences. Has India already lost the battle?The problem is that Delhi often thinks ‘after’; it is not the case with Beijing.